Nile Gardiner is a Washington-based foreign affairs analyst and political commentator. A former aide to Margaret Thatcher, Gardiner has served as a foreign policy adviser to two US presidential campaigns. He appears frequently on American and British television, including Fox News Channel, BBC, and Fox Business Network.

UN plan to replace the dollar is driven by anti-Americanism

I’ve been drawn into a vigorous and important debate originally sparked by a Telegraphstory that revealed the United Nations wants a new global reserve currency to replace the dollar. As the Telegraph's Economics Editor Edmund Conway wrote, the UN’s proposals if enacted would represent “the biggest overhaul of the world’s monetary system since the Second World War.”

Earlier this week I did an interview with Fox News where I called the proposal a “direct assault by the UN on American global power” from an organization with a “long track record of anti-Americanism.” My views have now been branded as “ridiculous” by Herr Heiner Flassbeck, the stern-faced German Chief Economist of the United Nations Conference on Trade and Development (UNCTAD), the official wing of the UN that deals with economic issues. Flassbeck is the lead author of UNCTAD’s controversial 2009 report which calls for the ousting of the dollar as the world's reserve currency. David Lee Miller at Fox quotes Flassbeck as saying:

(According to Flassbeck) demand for the US dollar is “irrational.” He argues the creation of an alternative financial instrument would provide more stability during times of economic upheaval. The new financial instrument proposed in his report would be pegged to a basket of different currencies to minimize what he called any “huge monetary shock.”

Flassbeck’s words about “irrational” demand for the dollar illustrate exactly the point I made earlier – the United Nations is obsessed with challenging America’s position as the world’s dominant power, and frankly its policies are all too often driven by a deep-seated anti-Americanism. I very much doubt that UNCTAD’s recommendations have much to do with sound economics, much like the Euro is a political project designed to advance European integration. They are political proposals with an overwhelmingly political agenda.

Fortunately there is little prospect of UNCTAD’s call to revolutionize the global financial system becoming a reality in the near term. Wall Street is bouncing back nicely and the dollar hasn’t collapsed as doomsayers in Europe had predicted.

It is rather farcical when the United Nations, an emperor with no clothes, comes up with some grand new scheme to end climate change, free the world of poverty, or liberate the world of nuclear weapons. The UN is an organization that can barely maintain its own dilapidated headquarters in New York, let alone oversee the launch of a new global currency. It is the worst managed multinational in the world, with staggering levels of incompetence, mismanagement, fraud and corruption, whose standing could hardly be lower. Any Fortune 500 or FTSE 100 company run like the United Nations would collapse in a week.

Still, the UN’s proposals pose a long-term threat to US interests, and will likely gain ground in the coming years with support from the likes of Russia, China and France. The United States may be the largest contributor to the United Nations, pumping more than $5 billion a year into the organization, but that doesn’t stop it from being its biggest target. Envy and often hatred of Uncle Sam runs deep within the UN, and UNCTAD’s dangerous ideas could well gain common currency among America’s strategic competitors.